Bain Capital near first close on new $6 billion fund (report)

Bain Capital is heading toward a first closing of its latest flagship fund that could push the vehicle nearly halfway to a $6 billion target, Dow Jones Newswires is reporting, citing people with knowledge of the situation.

The Boston-based firm has been on the fundraising circuit for Bain Capital Fund XI LP since the summer and now plans to close on 30 percent to 40 percent of the goal, the people said.

Much of the firm's work on Fund XI came amid intense political scrutiny of the private equity industry due to former presidential candidate Mitt Romney's time at Bain. Despite the attention heaped on the firm, however, these investors said the negativity did little to diminish their confidence in Bain's strategy.

Bain, which is typically one of the largest, if not the largest, limited partner in its own funds, is committing at least 10 percent of the capital for Fund XI, the people said. A spokesman for Bain declined to comment on fundraising.

In addition to its fundraising efforts, Bain has also been busy investing its money. In 2012, the shop closed on nine deals, including the roughly $487 million acquisition of medical device maker Physio-Control Inc., the $1 billion purchase of Scandinavian installation services provider Bravidia and the $1.6 billion buyout of Apex Tool Group, which sells hand and power tools. Bain invested in these deals out of Bain Capital Fund X LP, a $10 billion pool closed in 2008.

The firm also had a series of distributions, including stock sales of hospital operator HCA Holdings Inc. (HCA), which is co-owned by Kohlberg Kravis Roberts & Co., and sensors and controls maker Sensata Technologies Holdings NV (ST), as well as an initial public offering last month of Bright Horizons Family Solutions Inc. (BFAM), a child-care services provider.

Bain's Fund X so far has a net internal rate of return of negative 0.61 percent as of March 31, 2012, according to the California State Teachers' Retirement System. That information, the latest available, doesn't include more recent realizations. Bain's ninth fund, an $8 billion pool that closed in 2006, has a net IRR of 3.68 percent as of March 31, 2012, according to CalSTRS.

Bain is competing for dollars against rivals, including KKR, which recently said on a conference call that it would extend fundraising for the firm's North American buyout fund, Providence Equity Partners, another shop that has pushed out fundraising, and Warburg Pincus, which aims to wrap up its own effort in the spring.

Besides managing a buyout fund, Bain also manages venture funds and Asia-focused vehicles. In July, it completed fundraising for its second Asia fund with $2.3 billion.